Am I Admitting Fault By Offering To Settle?
Clients often express concern that if they attempt to settle a dispute, the offer to settle will be seen as admitting fault or guilt, or admitting the validity of the other side’s position. While there can be good strategic reasons not to offer a settlement, settlement offers are generally inadmissible to prove liability. The primary source for this principle in Washington is Rule of Evidence 408 (“ER 408”), which states:
“In a civil case, evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This rule also does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.”
ER 408 reflects a public policy of encouraging open negotiations to settle disputes, without fear that an attempted settlement would be admissible to prove liability for the claim. In order for ER 408 to apply, there must be a dispute. Ordinarily a dispute will arise once a lawsuit has been filed, but the filing of a lawsuit will not necessarily be the triggering event. A pre-litigation demand letter may demonstrate that a situation has ripened into a “dispute” for purposes of the rule. If there is no dispute, ER 408 will not bar evidence of an offer. ER 408 applies equally to successful settlement negotiations and unsuccessful ones. Notably, ER 408 bars admissibility not only of the settlement offer itself, but also of statements that “relate to” compromising a claim. Even though settlement communications may be inadmissible under ER 408 to prove liability, they may be available for other purposes. For example, they may show context for the meaning of a finalized settlement agreement, or they may show bad faith or knowledge. Also, courts have held that the rule does not prevent a party from offering into evidence their own communication; rather, it bars only admissibility of settlement communications made by another party.
Keep in mind that ER 408 is not the only rule touching on the topic of admissibility of settlement-like communications. For example, RCW 5.66.010 governs the “admissibility of sympathetic gestures” in the context of personal injury accidents. RCW 5.64.010 makes inadmissible even certain statements appearing to admit fault in the medical malpractice context. RCW 7.07.030 generally makes inadmissible statements made at a mediation. The lawyers at Beresford Booth have a wealth of experience with negotiating settlements, both before and after litigation has arisen. We would be happy to assist you in navigating a successful resolution.
To Learn More about Am I Admitting Fault By Offering To Settle? please do not hesitate to contact us at info@beresfordlaw.com or by phone (425) 776-4100 for assistance.